Range bound markets set to continue

first_imgShare Facebook Twitter Google + LinkedIn Pinterest Fall harvest is still underway for many producers, both in Ohio and the Midwest. It is well known that many harvested soybeans first, leaving corn to stand in the fields for additional drying to take place.Many were quite surprised with the moisture levels they were seeing for harvested soybeans. During the first half of October it was pretty common to see moisture levels below 12%, with many noting moisture as low as 9%. There was some frustration as those moisture levels meant the yield was reduced. Soybean yields across Ohio had a big range with yields in the same county reaching records for some producers, while others a few miles away had their worst yields in several years. It was certainly evident that Mother Nature played a major role with yields this year.The Oct. 23 USDA Weekly Crop Progress Report had the U.S. corn harvest at 38% while the U.S. soybean harvest was 70%. At that same date, the Ohio corn harvest was 35% and the Ohio soybean harvest was at 76%. Both the Ohio and U.S. corn harvest numbers were behind the five-year average while the soybean harvest in both areas was slightly ahead of normal. On that same date it was noted that the U.S. corn harvest was below expectations for the third week in a row. The question became, “Was harvest less than expected due to higher yields than predicted or was the harvest simply progressing slowly?” As October drew to a close, some analysts would answer the above question with this notation, “Yields are higher than expected.” Some are already anticipating the Nov. 9 USDA report showing an even bigger U.S. corn yield than the October reports which had the U.S. corn yield at 171.8 bushels per acre, up 1.9 bushels per acre from September. Many producers are reporting their corn yields are better than expected. They are completely surprised, even flabbergasted at these yields in spite of the adverse weather conditions this year. Those conditions included replanting corn along with heavy rains received in just a few hours or days. Others report this was a record year for the number of corn acres replanted.From a price perspective it is well known that corn is stuck in a range of $3.40 to $3.60. The $4.15 level seen in early July for December CBOT corn was the summer high. The lack of weather problems in the Midwest this summer has kept corn under pressure into harvest. The prospect of seeing declining U.S. corn exports for new crop corn has been well known for months. U.S. corn export sales are behind those of last year by 30% while USDA is projecting a 19% decline for the 2017-18 marketing year. Weather conditions in Brazil often forced soybeans to be planted in their spring season instead of corn. Many are expecting corn production in Brazil to be down this coming year with Argentina’s corn production nearly identical to last year. Late last month, Mexico was looking to buy corn from Argentina. It could be nothing, a one-time event, or a change in policy as Mexico has traditionally been a strong buyer of US corn.Soybeans seem stuck in a range of $9.50 to $10. Brazil weather has been dry in the north much of October while the central and southern areas have seen plentiful rains. Expected rains in late October have been late in arriving.Keep an eye on China’s buying patterns for soybeans and where they originate. China’s imports have been at record levels in the past several months. Any hints of additional demand for shipments from the U.S. will only serve to reduce ending stocks in coming months. Others are also suggesting that U.S. soybean production could be shrinking, as yields appear to be declining as harvest moved beyond the 50% level.last_img

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